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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: edamo who wrote (133524)	6/19/1999 9:34:00 AM
From: D.J.Smyth	Read Replies (2) \| Respond to of 176387

ot, ed, thanks for the cpq assessment. however, management or no, they've got to make a profit; and need the internal programs to do that. i suppose you're referring to new management cutting out the dead wood (i.e., the unforseen cyrix inventory, etc.)? currently their hardware margins are not good and service margins are badly slipping. do you recall what blue's hardware margin's were when it was trading at 8 X? as i recall, they were making a profit and were not posting consectutive quarterly losses as is cpq. gerstner righted a ship taking on water. an analyst from Bear Stearns noted on CNBC that cpq was not an equal comparison to IBM in 96 as cpq appears to be sinking (paraphrased - he actually said "have many more issues to confront)"

To: edamo who wrote (133524)	6/19/1999 10:20:00 AM
From: stockman_scott	Read Replies (1) \| Respond to of 176387

<<they are far beyond dell with these capabilities..just have to get management...>> edamo: I think we may have to agree to disagree here. IMO, Compaq has bad management, a lack of focus, diminished credibility with all their stakeholders, and a flawed business model. I'm not even sure "a Gerstner type" would try to turn around the company now <G>. I agree with Piper Jaffray's Kumar who says Compaq has some serious downside from here. DELL keeps raising the bar in the industry and Compaq is severely crippled at the moment. Here is a quote from SG Cowen two days ago... <<while the PC industry questionmarks remain, DELL looks superbly positioned to drive their customer aquisition model. DELL remains our top pick in the PC systems sector; its competitive business advantage stemming from its well-honed direct model, if anything it looms even more potent as it leverages the internet to drive its customer acquisition and revenue generation model. In contrast, for major indirect players (eg. CPQ), this transition still looms as a huge challenge.>> On June 17th Prudential made the following comments after meeting with DELL and Compaq execs in Texas... <<DELL demand remains strong with win rates at record company levels of 63%, the pricing environment remains unchanged and Compaq's turmoil has created "unprecedented opportunity to gain share." We continue to believe DELL remains best positioned in the PC group and that the recent weakness in the shares has created a buying opportunity. DELL remains our favorite stock.>> And finally, check out these Deutche Banc Alex Brown comments on Compaq (made early in the morning on Thursday)... <<Company-Specific Issues Continue to Plague Firm...Market Perform Rating Industry remains healthy - we attribute miss to Compaq's execution issues. While we would commend management for announcing the miss as soon as it became apparent (which we would contrast to last quarter when the preview was more of a post-view), they explicitly avoided discussing the components of the miss or quantifying the extent of the restructuring efforts that will be imposed in F3Q. Given this, we have lowered our revenue and gross margin expectations. ASP's remain under pressure, limiting revenue growth -- but we continue to forecast strong PC results at DELL, Gateway, IBM and Hewlett Packard. Compaq's shortfall in our view, is due to the disarray in its infrastructure, with no permanent CEO and executive team in place, and a continuing stream of mid-level and senior-level departures reducing productivity and hobbling the company's ability to respond in a very competitive marketplace. Outlook remains uncertain....Given that the company needs to make significant changes to both its infrastructure and distribution strategies in our view, and in our belief that a new executive team will require at minimum 6 months to put the company back on course, we belive it is too early to invest in a turnaround. We are also lowering our revenue and EPS assumptions going forward.>> ------------------------------------------------------------------- I am sort of like Janus. I invest in THE BEST high tech businesses I can find and forget about the rest. Janus looks carefully at a company's management team, their business model, their growth prospects, and finally their ability to execute. I have not seen Compaq in ANY of the high performing Janus funds and I don't expect them to be adding it anytime soon. Compaq is too large for me and has way too much baggage. I am very concerned about how the company has damaged their relationship with their employees, shareholders, the investment community and most importantly the customers. IMO, this will take a LONG TIME to correct. I will choose to have DELL be my only hardware and storage play. DELL has earned its position in my portfolios. In fact, now that I have done some more homework I may even buy more DELL in my online IRA. Don't get distracted by Compaq. There are too many better alternatives to invest in, IMO. Thanks again for your comments and Good Luck Investing. Best Regards, Scott